Debt at building supply firm hits £984.6m as revenue falls 14%, with further market deterioration forecast
Builder's merchant Travis Perkins has announced a £300m rights issue to reduce its debt burden, as it reported further falls in revenue.
The firm said it would issue around 86 million new shares at 365p each, in a bid to improve its trading position through the recession. The group's net debt was £984.6m on 31 March.
In a trading update to the stock market today, the firm said turnover had slumped by 13.6% in the four months to 30 April, with like-for-like sales down 14.4%, leading to a fall in pre-tax profit compared with the same period last year.
The group said it had performed ahead of the board's expectations in the period but warned that markets would continue to decline.
It said: “The board expects the markets in which the group operates to continue to weaken until at least the third quarter of 2009. The board believes recent lead indicators relating to the housing market, such as mortgage approvals; housing transactions and house prices; consumer and customer confidence; and construction orders generally show signs of stabilisation. However, the impact of any potential increases in unemployment on these markets and indicators is uncertain.”